Before this Court is a motion by defendant Alan London ("London") for an order pursuant to Rules 12(c) and 12(h) (3), F.R.Civ.P., dismissing the complaint against him on the ground of lack of subject matter jurisdiction. In its complaint, plaintiff invokes this Court's jurisdiction over its claims against the Federal Republic of Nigeria ("Nigeria") and the Central Bank of Nigeria ("CBN") under the Foreign Sovereign Immunities Act ("FSIA"),
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while it contends that jurisdiction over defendant London is properly exercised under principles of pendent jurisdiction. It is undisputed that there exists no independent basis for the exercise of federal jurisdiction over plaintiff's claim against London.

In support of his motion, London presents two alternative arguments. First, he argues that 28 U.S.C. § 1330 does not provide a basis for federal jurisdiction in this action, and that there is accordingly no possible federal claim to which plaintiff's claim against London can be pendent. Alternatively, London asserts that even if plaintiff has a federal cause of action against Nigeria and CBN, plaintiff's claim against London is not pendent to those claims. This Court has concluded that while federal jurisdiction in this action properly exists under 28 U.S.C. § 1330, pendent party jurisdiction is inapplicable to plaintiff's claim against defendant London. Accordingly, the claim against defendant London will be dismissed.

I.

The facts alleged in plaintiff's complaint that are necessary to resolve this motion can be quickly summarized. Plaintiff Tri-Ex Enterprises, Inc. is a New York corporation. In April 1974, plaintiff entered into contracts with Nigeria to supply 500,000 metric tons of cement at a price of $49.50 per metric ton.In August 1974, Nigeria agreed to increase the price it would pay plaintiff to $53 per metric ton. Payment to plaintiff for the cement was to have been made by a letter of credit issues by CBN and confirmed by Morgan Guaranty Trust Company of New York ("Morgan"). Nigeria's contracts with plaintiff were part of a huge program of cement purchases during 1974 and 1975. It soon became apparent that Nigeria had contracted for the delivery of much more cement than could feasibly be discharged in Lagos, Nigeria, and sometime during the middle of 1975 there developed a massive backlog of ships waiting to discharge their cement. In response to this congestion, CBN in September 1975 issued directives restricting the ability of suppliers, such as plaintiff, to deliver the cement they had contracted to supply. As a result of these restrictions, plaintiff found itself unable to find any shippers willing to deliver cement to Nigeria. At Nigeria's request, plaintiff then traveled to Lagos in an attempt to settle compensation for breach of the contracts, but no compensation was ever paid.

In November 1975, London was introduced to plaintiff by Lime International Corp. ("Lime"), a third party, and was informed of plaintiff's inability to find a shipper. Upon London's assertion that he could find shippers willing to deliver cement to Nigeria, plaintiff agreed that if London was able to present documents establishing the shipment of cement, plaintiff would direct Morgan to pay London a substantial portion of the funds Morgan would otherwise pay plaintiff. In a fraudulent effort to obtain these funds, London presented to plaintiff four falsified bills of lading. Plaintiff, believing this documentation to be genuine, presented them to Morgan along with drafts aggregating $2,286.473. Plaintiff directed Morgan to pay it $129,423, and to pay the balance to Lime and to London's Liechtenstein corporation, Temo Anstalt. Morgan, however, refused to pay these drafts, apparently having discovered that the bills were not genuine. Plaintiff ultimately went out of business in March 1976.

On July 8, 1980, plaintiff filed this action against Nigeria, CBN, Morgan, and London. Plaintiff alleges breach of contract claims against defendants Nigeria and CBN, as well as a claim against Nigeria asserting that plaintiff was induced to travel to Nigeria and to suspend its efforts to supply cement upon Nigeria's fraudulent representation that plaintiff would be compensated. Federal jurisdiction over these two defendants is asserted on the basis of the jurisdictional section of the FSIA, 28 U.S.C. § 1330. Plaintiff also claims that Morgan breached its duty toward plaintiff under Morgan's letter of credit by refusing to state the reasons for rejecting payment of the drafts. Plaintiff asserts pendent jurisdiction over this claim against Morgan. Plaintiff's claim against London arises from the false bills of lading. Plaintiff alleges that it was prevented from fulfilling its contracts as a result of London's deceitful conduct.

II.

Because pendent jurisdiction is based upon the existence of federal jurisdiction over a related claim, United Mine Workers v. Gibbs, 383 U.S. 715, 725, 16 L. Ed. 2d 218, 86 S. Ct. 1130 (1966), this Court must first determine whether 28 U.S.C. § 1330 properly supports federal jurisdiction over plaintiff's action against Nigeria and CBN. Defendant London asserts that the Second Circuit's recent decision in Verlinden B.V. v. Central Bank of Nigeria, 647 F.2d 320 (2d Cir. 1981), cert. granted U.S. , 102 S. Ct. 997 (1982), is dispositive of his contention that plaintiff cannot establish federal jurisdiction simply by suing a foreign sovereign under 28 U.S.C. § 1330. London's argument, however, is based upon a misreading of Verlinden. Verlinden, which arose out of the same program of cement purchases by Nigeria which resulted in the instant controversy, involved a suit by an alien plaintiff against a foreign sovereign under 28 U.S.C. § 1330. The Second Circuit held that although 28 U.S.C. § 1330 purported to give the district courts original jurisdiction over suits against foreign sovereigns, there is no constitutional basis for that grant when the plaintiff is an alien alleging nonfederal causes of action. Verlinden, 647 F.2d at 330.

Any exercise of federal jurisdiction must, of course, have both a constitutional and a statutory basis. Kline v. Burke Construction Co., 260 U.S. 226, 234, 43 S. Ct. 79, 67 L. Ed. 226 (1922); Sheldon v. Sill, 8 How. 441, 448 (1850). In Verlinden, the Court rule; that although 28 U.S.C. § 1330 provided the necessary statutory foundation, 647 F.2d at 324, there was no constitutional grant of power to the federal courts under Article III § 2, cl.1 of the Constitution. The court held that a claim grounded on § 1330, but asserting only nonfederal rights to relief, was not a claim "arising under" the laws of the United States, as that term is used in Article III. 647 F.2d at 327-30. In addition, because Verlinden was a suit between two aliens, it could not fit under the diversity grant of Article III, § 2, cl. 1 which provides, inter alia, that "the judicial power shall extend to . . . Controversies . . . between a State, or the Citizens thereof, and foreign States, Citizens or Subjects." See 647 F.2d at 325.

Unlike the situation in Verlinden, it is precisely this clause that provides the constitutional basis for the exercise of federal jurisdiction in the instant case. Plaintiff is a citizen of New York. Defendants Nigeria and CBN are foreign states.
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Thus there exists controversy between a United States citizen and a foreign state, squarely within the Article III grant of jurisdiction. The fact that defendants Morgan and London are also New York citizens does not affect this grant because Article III, unlike the statutory grant of diversity jurisdiction, 28 U.S.C. § 1332, requires only partial, as opposed to complete, diversity. State Farm Fire & Casualty Co. v. Tashire, 386 U.S. 523, 531, 18 L. Ed. 2d 270, 87 S. Ct. 1199 (1967). Plaintiff, therefore, has properly invoked this Court's jurisdiction under 28 U.S.C. § 1330 and Article III, § 2, cl.1 of the Constitution.

III.

Having determined that there is federal jurisdiction over the claims against the Nigerian defendants, we must now decide whether there is pendent party jurisdiction over the claim against London. In In re Investors Funding Corporation of New York Securities Litigation, 523 F. Supp. 550 (S.D.N.Y. 1980) (Conner, J.), this Court set forth the principles that guide its exercise of pendent party jurisdiction.See 523 F. Supp. at 560-62. Although ...

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